Social Science Spectrum ISSN 2454-2806 Vol. 2, No. 1, March 2016, pp. 8-19 Emigration and Impact of Utilisation of Remittances at Household Level in India: A Propensity Score Matching Approach Imtiyaz Ali  and R. B. Bhagat  Abstract This paper examines the effect of remittances on the socio-economic circumstances of poor and non-poor households receiving remittances and also shows the impact of remittances at the source region in India. We use data from the 64 th round of National Sample Survey. It is estimated that there are 3.49 million emigrant households. A vast disparity exists in the utilization of remittances in day to day life expenditure and human capital formation by remittances receiving households. There has been an impact of remittances on the emigrant households in the source region. Based on propensity score matching, the paper shows that remittances have a positive and strong effect on reducing rural household poverty compared with urban households. Keywords: Emigration; remittances; poverty status; National Sample Survey; Propensity Score Matching; poverty status. I. Introduction Remittances play a significant role in the socio-economic condition of emigrant households in India. Household members emigrate to look for a better standard of living and improve their household status and India is no exception to it (Bhagat, Keshri & Ali, 2013; Quisumbing & McNiven, 2007; Stark & Bloom 1985). International migration plays a significant role in reshaping and crafting the socio-economic circumstances of emigrant households (De Haan, 1999; De Hass, 2009; Sikder & Ballis, 2013; Stark & Lucas, 1988) and the most tangible of these are remittances that migrants send home (Sikder & Ballis, 2013). The direct result of emigration is remittances and an explanation of this outcome has been a matter of discussion among scholars. Most of the early researchers have deduced the effect of migration negatively and argued that this promotes spending on unnecessary consumables (Chami et. al., 2003; Sofranko & Idris, 2009) as well as the full or partial dependence of the household members on remittances (David, 1995; Lipton, 1980). On the other hand, some other researchers consider the positive aspects of emigration and remittances arguing that expenditure out of remittances on consumption may not necessarily be futile as it contributes to social, cultural and economic development through financial and social investment (Azeez & Begum 2009; De Haan & Yakub, 2008). It also acts as a means of risk sharing and provides security from any unwanted financial crisis (Lucas & Stark, 1985; Yang, 2009; Zachariah & Rajan, 2008; Bhagat, Keshri & Ali, 2013). Remittances are very important for many households in case of developing countries like India where 56 per cent of remittances are spent to meet day to day expenditure and they are also utilized during expensive social rituals and traditional transactions such as dowry (NSS, 2007-08; Jimenez-Soto & Brown, 2012; Tumbe, 2012). Additionally, remittances help in improving the quality of life by increasing the family's expenditure on education, health care, housing and other necessities (Sikder & Ballis, 2013; López-Videla & Machuca, 2014). They also provide capital for setting up an entrepreneurial venture (Azeez & Begum, 2009; Ratha, 2007). It has been argued that remittances empower the  Imtiyaz Ali, Ph.D. Research Scholar, International Institute for Population Sciences, Govandi Station Road, Deonar, Mumbai-4000 88. E-mail: aliimtiyaz09@gmail.com  R. B. Bhagat, Professor and Head, Department of Migration and Urban Studies, International Institute for Population Sciences, Govandi Station Road, Deonar, Mumbai-4000 88. E-mail: rbbhagat@iips.net The authors would like to thank Dr. Kunal Keshri, Assistant Professor, G.B. Pant Social Science Institute, University of Allahabad, Jhusi, Allahabad for his encouragement and Raj Kumar Verma, Research Scholar, International Institute for Population Sciences, Mumbai for his technical assistance. The authors also wish to thank the anonymous referees of the journal for useful comments on the first version of the manuscript.